PerformanceTalent Management

Employee recognition strategy – how do you approach it, so it makes sense?

employee recognition strategy

Imagine that engagement in your company suddenly increases by 129%. What would the organization you work for look like then? Is such a scenario even possible? It turns out that such growth can occur through seemingly simple action. Companies that have begun strengthening their recognition practices and approaching them strategically report such results. Additionally, employees at these companies tend to have longer seniority and plan their future with a company that values them. Such results are hard to ignore and, most importantly, they are not uncommon.

Employee recognition translates into engagement 

The impact of employee recognition on employee engagement is undeniable. The Tower Watson Report revealed that companies, where managers showed recognition to their employees, saw a 20% to 60% increase in engagement. This is also confirmed by the employees themselves. 78% of those surveyed would put even more effort into their work – they would work harder – if only their efforts were recognized and praised.

Appreciating employees affects their engagement, which in turn translates into the more effective achievement of company goals – including financial ones. A prominent example is Best Buy, an American company that sells electronics. They observed that increasing their employee engagement by just 0.1 points resulted in a $100,000 increase in-store revenue.

The benefits of employee recognition strategy

An increase in engagement and the financial result are not the only benefits of having a recognition strategy. In a study conducted among social workers, it has been shown that being appreciated and supported by superiors affects the well-being of employees and also directly affects the quality of their work. They feel close to the organization they work for, are happy with it, and are more productive. The positive effects of recognition are also observed in other industries.

Similar conclusions were drawn by the Great Place to Work organizers, demonstrating in a study that companies with high levels of engagement and recognition at work can report three times higher productivity, lower turnover and absence, more job applications, and higher innovativeness.

Employee recognition strategy will strengthen employee engagement at your company. And how do you ensure adequate recognition in an organization with over 1,000 employees? It is essential to have the right tool for this.

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Misplaced and invisible recognition

This is why it is so surprising that with so much data on the crucial role of recognition, its level is unsatisfactory for employees. The 2017 Global State of Employee Engagement study covered 1,000 organizations and as many as 63% of employees in these companies felt that they did not receive adequate recognition at work. 8% of workers even stated that they were never appreciated.

This data is puzzling and may have many causes. First of all, companies do not always approach recognition strategically. Their actions are random, discretionary, often inconsistent – or even nonexistent. I know many organizations where the main “expression of recognition” is not pointing out an error. There is a prevailing belief that corrective feedback is extremely important while praising employees for their efforts and work results is unnecessary. They finally did what they had to do.

Another reason may be a mismatch between the form of recognition and the needs of employees. Then expressions of recognition may go unnoticed by them. Yet another reason may be the focus on material expressions of recognition, which employees quickly begin to consider as a standard rather than an expression of recognition at work. In such cases, benefits and bonuses no longer have an impact.

Form of recognition matters

The question about whether you were appreciated at work in the past week is one of the 12 questions in the Gallup test. The researchers of the Gallup Institute recognize the importance of recognition at work and have studied this area for years. They have concluded that extensive benefits packages, medical care, and quarterly awards are not the most important recognition for employees. Material recognition of an employee is important, but what they remember most are other gestures from the organization.

The activities implemented in the company should be multidimensional and respond to the diverse needs of employees. An intangible form of recognition can be public recognition in the form of positive feedback. Private recognition from a supervisor, client, or colleague. Achieving high-performance results on interim evaluations. Delegating more responsibility or assigning more challenging tasks as a way of recognition and showing trust.

The form in which recognition is shown matters a lot. Employees give different weight to individual actions, and they perceive them differently. Differences can be seen even in the form of verbal recognition. Simple “thank you” increases the sense of recognition of employees by 116%. Spontaneous positive feedback increases it by 172%. In contrast, formally appreciating an employee translates into a 355% increase in their sense of recognition.

The example comes from the top

The work of managers is crucial to a strategic approach to recognition in the organization. First of all, they are the ones who have access to the most important information, that is the workload and achievements of a given employee. They are usually the ones with the chance to give immediate, spontaneous positive feedback. They are also the ones who are usually responsible for matters like bonuses and incentives. The second reason why it is on the shoulders of managers to do the most work-related to recognition strategy is that it is their recognition that has the highest importance for employees.

It turns out that it is not just the form of recognition that matters. It also matters who in the company shows recognition. Gallup Institute study shows that it is the recognition from a direct supervisor that is most memorable. In second place was recognition from a senior manager or CEO. The least memorable are compliments from co-workers.

The recognition strategy should be implemented from the top. Activities that encourage employees to notice and appreciate each other’s work are positive and needed. But they will not be successful if the example and recognition do not come from board members, directors, and senior managers. The recognition strategy and its effects will therefore depend on the leadership style in the company.

Recognition and diversity in the organization

Adjusting the form of recognition in an organization should start by considering what employees need. One of the analysis criteria may be age. The form of recognition should be tailored to the employee’s life stage, values, and expectations. A long-time employee approaching retirement age will need a different recognition form, and a young parent or a college graduate taking their first steps in the job market will need a different form.

The key to effective, strategic recognition within a company, is flexibility and empathy. It is the task of the organization and the managers working there to correctly identify the needs of its employees and to offer them recognition and support that they will find meaningful and empowering. Especially since a recognition strategy can be a great vehicle for your company’s values.

Forms of recognition are now an element that distinguishes a particular company from its competitors. It could be free preschool for your child, or a vacation supplement. There are also organizations that have taken a more innovative approach to this topic. Apple and Facebook, for example, have decided to cover, for the female employees, the fees of the egg freezing procedure. This unusual idea is not only a benefit but also a message to employees that the organization cares about both their well-being at work and in their personal lives.

Employee recognition strategy and remote work

Employees who have had to quickly transition to remote work may feel lost or even forgotten by the organization. Until now, they could expect face-to-face conversations where managers and co-workers had the opportunity to appreciate their work and efforts. It is worth mentioning that the effort they put into the tasks was also much more visible. Now, many processes are done remotely – but that does not have to be a barrier to a strategic approach to recognition.

Organizations that work remotely, choose to implement tools that help communicate recognition to employees or appreciate each other. These can take the form of a new competency added to the employee profile in the talent management system or a newsletter with recognition and a description of achievements that is sent to all employees.

Online solutions can be a great tool, but they will not replace humans in the recognition process. The appraisal cliché included in most emails will do more harm than good. They will be considered false declarations and apparent actions. The most important thing is that the recognition is authentic and demonstrates an individual approach. This is why it is important to focus on improving the competence of managers, as they have the greatest power here.

Build an effective employee recognition strategy with the right tools.

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